The number of £100m-plus deals in the South East office market has reached a four-year high, according to Savills.
Deals valued at £100m or above accounted for 19% (£449m) of the £2.3bn invested in South East offices in the first three quarters of 2015, compared with 2014 when they represented only 4% (£135m) of total investment in the region’s offices.
M25 prime office yields have compressed to sub-5% for the first time since August 2007, after peaking at 7.5% in June 2009. These prime yields are moving closer to the record low of 4.75% reached during the period August 2006 to August 2007.
UK institutions accounted for the largest proportion of transactions (47%), spending £1.1bn in the South East office market, followed by property companies (24%), which were responsible for £568m.
Steven Lang, director at Savills Research, said: “The South East office market offers favourable yields in relation to its London counterparts and in certain locations provides large lot sizes and opportunity for rental growth.”
